STR Weekly Insights: 16-22 June 2024

Analysis by Chris Klauda, Will Anns 

Highlights 

• Juneteenth holiday calendar shift impacted U.S. performance across the board. 
• All chain scales reported RevPAR declines. 
• EURO 2024, Formula One and Taylor Swift’s Eras Tour lifted cities across Europe. 

Shift in Juneteenth holiday pushed occupancy down while rate held. 

U.S. revenue per available room (RevPAR) decreased 2.4% year over year (YoY), which was entirely the result of an occupancy decline of 1.8 percentage points (ppts). Average daily rate (ADR) was basically flat at +0.1% YoY.  

For most of 2024, weekdays (Monday – Wednesday) have been elevating overall weekly performance. The Juneteenth federal holiday, occurring on Wednesday this year compared to Monday last year, essentially halted midweek business and group travel. RevPAR declined 5.8% on Tuesday and 5.9% on Wednesday, the result of occupancy down 3.3ppts and ADR down 1.4% for both days. Monday RevPAR increased 3.6% due the easy comparison to last year when Juneteenth fell on Monday. Thursday showed a slight RevPAR decline (-0.4%). Weekends (Friday-Saturday), which have produced negative RevPAR comparisons for 14 of the past 24 weeks, continued the streak with a 1.3% RevPAR decline YoY. 

Decreases more pronounced in the Top 25 Markets 

While weekdays have been elevating industry performance in recent months, weekdays in the Top 25 Markets have provided the primary lift. Because of this, the Juneteenth shift had an even more dramatic impact on this segment. RevPAR declined 2.9% in the Top 25 Markets with Tuesday and Wednesday down 8.3% and 9.2%, respectively, with a generally equal decline in occupancy and ADR. The rest of the country also saw a RevPAR decline (-2.0%), however, Tuesday and Wednesday’s declines were less than half the amount seen for the Top 25 with the decline due entirely to occupancy. 

Only eight of the Top 25 Markets produced positive RevPAR comparisons with Seattle and Philadelphia reporting double-digit increases. These two markets also saw the greatest RevPAR gains on Tuesday and Wednesday, which were also in double figures.  

No chain scale was immune to the impact 

From Luxury to Economy, all chain scales saw a RevPAR decrease due primarily to occupancy declines. Luxury hotels were the exception with RevPAR down 3.6% on a 3.9% drop in ADR. Upper Upscale saw the smallest RevPAR decline (-2.1%) followed by Midscale (-2.5%), Upscale (-2.8%) and Upper Midscale (-3.0%). Tuesday and Wednesday showed the greatest RevPAR decline across the top three chains scales. The bottom three chain scales did not experience as great a decrease on Tuesday and Wednesday with their largest declines on Sunday then Friday/Saturday.  

Group demand also impacted by the holiday shift 

Luxury and Upscale hotel group demand decreased 7.2% compared to the same week last year, representing only the second group demand decrease over the past eight weeks. Again, impacted by the holiday shift, the greatest YoY declines were on Tuesday (-12.6%), Wednesday (-16.3%) and Thursday (-10.1%). Only Sunday and Monday saw increases with Monday benefitting from an easy comp from last year. Positive YoY Group ADR continued for the eighth week in a row, increasing 3.3% YoY. Four Top 25 Markets saw group occupancy increases greater than five ppts, including Philadelphia, Anaheim (Orange County), Nashville, and Oahu. 

Global performance was the bright spot this week with sports and concerts in full swing 

Steady RevPAR growth continues across the globe fueled by ADR increases while occupancy slows. In particular, Europe experienced strong performance. After the first full week of the Euros, Germany saw a YoY RevPAR increase of 30.0%, primarily because of ADR, which increased 27.3%. All host cities saw positive ADR comparisons with the highest gain in Stuttgart at +88.7% YoY. The matches also resulted in large YoY occupancy increases for Stuttgart (+14.0ppts to 85.0%) and Dusseldorf (+14.6ppts to 82.8%).  

The Spanish hotel market continued with considerable YoY growth as RevPAR increased 24.4%. Barcelona led all markets with a RevPAR increase of 39.9%, with the practice and qualifying nights of the 10th F1 race this year at the Circuit de Barcelona-Catalunya. Significant RevPAR gains were also seen in Madrid (+27.8%) and Balearic Islands (+15.2%). 

In the U.K., a YoY RevPAR gain of 7.5% was entirely supported by ADR growth (+7.3%). Taylor Swift’s Eras tour took her through the Cardiff and London. RevPAR in London was up 7.5% YoY, while Cardiff saw a YoY decline of 5.8% with more performances last year in the same week by Harry Styles. 

France saw a YoY occupancy decline of 4.2ppts to 78.3%, -11.5% in ADR and -16.0% in RevPAR. Last week was a Paris Fashion week, and although absolute performance increased week over week, year-over-year percentage changes for Paris and the surrounding Ile-de-France region came in at -35.4% and -23.9%, respectively. A lot of business and leisure travelers look to be avoiding the region ahead of the Olympics. Fortunately, occupancy on the books is nearing 80% for the Games.  

Looking ahead 

The next week of data should show recovery of some business demand, which was delayed with the Juneteenth holiday. We expect a return of the strong performance in the Top 25 Markets on weekdays and improved group demand. The week of July 4th (the holiday is on a Thursday this year) is expected to produce a drop in ADR with a more dramatic decrease in occupancy. Note, AAA is expecting record road trips, and the TSA also expects record travel during that time while the recently reported decline in Consumer Confidence in May could temper these expectations. The two weeks post July 4th should show a week-over-week increase in occupancy with the metric reaching its apex in the week ending July 20.  

Globally, summer should produce strong performance in cities across the northern hemisphere benefitting from concerts and sporting events. Additionally, most key European cities will also benefit from increased travel by Americans. In May, outbound travel from the U.S. was up 11% overall.